A New Firm Enters a Market Which Is Initially Serviced

question 68

Multiple Choice

A new firm enters a market which is initially serviced by a Bertrand duopoly charging a price of $30.Assuming that the new firm is equally as efficient as the incumbent firms,what will the new price be should the three firms coexist after the entry?

• A) Above $30
• B) Below $30
• C) Equal to $30
• D) Unable to tell given the information provided.

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Definitions:

Public Places

Areas accessible to all members of a community, including parks, libraries, and streets, where people can gather, interact, or transit.

Twisted-pair Cable

A type of wiring in which two conductors of a single circuit are twisted together to cancel out electromagnetic interference.

External Casing

The outer shell or covering that protects the internal components of a device or machine.

Wires

Thin strands of metal or other materials used to conduct electricity or signals between devices or components.